YALE LAW JOURNAL Vol.XXXVII NOVEMBER, 1927 No. I ENGLISH PROPERTY REFORM AND ITS AMERICAN ASPECTS P Ocy BORDWELL "In England men are rated by their income, in the United States by their principal." Such was the remark of an American officer returning from the World War. In that remark lies the explanation of much of the difference between property condi- tions in England and in the United States. Settled property is the rule in England. It is the exception in the United States. It is traditional for the Englishman to make provision for the marri- age and the fruits of the marriage before the marriage takes place. To the romantic American the adherence to this custom in international marriages has seemed coldblooded and calculat- ing. On the other hand it has been said of the Englishman that to him it would seem almost as immoral to do away with the marriage settlement as with marriage itself., And when the oldest son attains his majority or wishes to marry, provision is made for the third generation by means of a settlement. This is so much a part of English life that those who shaped the recent reform of property law in England could not have changed it if they would. Nor would they if they could. The strict family settlement may disappear and the trust for sale take its place, but in the one form or the other settled property will continue to characterize English life. The great problem in England has been how to reconcile this provision for the needs of future generations with free trade in land. Prior to the Settled Land Act of 1882,2 the alienability of settled land was possible through the grant of express powers to the life tenant. That act conferred such powers on him as a ISeehe statement by Osborne Morgan quoted in UNDERIULL, A CsNTURY Op LAW REFOn (1901) 290. Mr. Morgan was the chairman of the Select Committee of 1878-9 on Land Titles and Transfer. 2 (1882) 45 & 46 Vict. c. 38. YALE LAW JOURNAL matter of law 3 and safeguarded the interests of others under the settlement by requiring the purchase money to be paid to the trustees of the settlement or into court,4 and imposing the limi- tations of the settlement on the proceeds.; A great measure of free trade was thus secured. The recent reform in England was the logical outcome of that step.6 The new Property Acts have made possible the free alienability of land to a remarkable extent I and at the same time retained the main features of the old settle- ment. In doing this, however, they have shifted from powers to estates as the basis for conveyancing Instead of the beneficial life tenant having a power to convey the fee, he now has the legal fee 9 and sells as the "estate owner" of that fee.10 This change, from powers to estates as the basis for conveyancing, was one of the high spots of the reform. It presented many practical difficulties.": These difficulties were not lessened by the fact that the new acts include under the technical designation of settle- ments and settled land even more than had been included by the Land Transfer Act of 1882.12 The conveyancing device, other than the settlement, used to secure free trade in land by those who shaped the reform legisla- tion in England was the personalty trust or the trust for sale.13 This has been in use for many years. One of its advantages was that by means of two deeds, a vesting deed and a trust deed, the 3§ 3. 4§ 22 (1). r,§§ 22 (5), 24. 6 UNDERHILL, A CONCISE EXPLANATION OF LORD BIRKENIIEAD's ACT (1922) 31. 7 "The idea is always to have a tenant or tenants in fee simple absolute in possession who will be able to convey the land." GUIDE TO THE NEW PROPERTY STATUTES BY THE EDITORS OF LAW NOTES (1925) 4. 8 "Estates (as opposed to powers) are to be the basis of conveyancing." Memorandum by Mr. B. L. Cherry on The Principles and Objects of the Law of Property Bill, FOURTH REPORT OF THE ACQUISITION AND VALUATION OF LAND COmMITTEE (1919) Appendix IV, 44. 9 (1925) 15 Geo. V, c. 18, §§ 4 (2), 5, 6, 7. 10 (1925) 15 Geo. V, c. 20, § 1, (4) (7). 11 Not the least of these has been as to the devolution of the beneficial life tenant's legal fee. See Lightwood, Devolution of Settled Land (1927) 63 LAW JOURNAL 120, 152, 176; ibid. Real Estate and Personal Representa- tives, ibid. 202. 12 Compare (1925) 15 Geo. V, c. 18, § 1, with (1882) 45 & 46 Vict. c. 38, § 2. The principal new statutory settlements are "where a married woman is entitled in fee simple, subject to a restraint on anticipation, and where property is subject to any family charge, whether by way of rent charge or capital charge." Lightwood, The New Law of Settled Land (1925) 60 LAW JOURNAL 679. See also op. cit. supra note 7, at 223. 13 (1925) 15 Geo. V, c. 20, §§ 2 (1) (ii); 2 (2) as amended by (1926) 16 & 17 Geo. V, c. 11, Schedule; c. 3 (1) (b); c. 22-23. ENGLISH PROPERTY REFORM details of the trust were kept off the title.14 By the reform legis- lation this scheme of two deeds was extended to settlements.'2 The reason why the trust for sale was called a personalty trust was that an imperative duty to sell was imposed on the trustees and this worked an equitable conversion of the beneficiary's in- terests into personalty. The trust was for the purpose of sale and the beneficiary's interest was in the proceeds. The pur- chaser was not concerned with the equities under the trust. Equities prior to the trust of which the purchaser had notice were binding on him.1r The new legislation preserves the trust for sale and provides that where the trustee is a trust corpora- tion or where there are two trustees approved by the court, not only may the equities under the trust be gotten rid of, but prior equities may be overreached."7 A similar overreaching effect is given to settlements."s Certain equities, such as equitable mort- gages protected by title deeds, equitable restrictions, and agree- ments to convey, are excepted from this overreaching effect,19 but, except in the case of equitable mortgages protected by title deeds, these must be registered as land charges 2o or they are not binding even on a purchaser with notice." At the same time the number of trusts for sale is increased by the creation of statutory trusts for sale, the most notable of which takes the place of the common law tenancy in common." With two important exceptions, all settlements must be made by way of trust.23 Between them, settlements and trusts for -1Lightwood, op. cit. supra note 12, at 653; ibid. The NcM Conrcyancing: A Review (1926) 62 LAW JOURNAL 66, 67. 1 (1925) 15 Geo. V, c. 13, § 4. 16 Lightwood, The New Conveyancing: A Review (1926) 62 LAw Jo URN 67; ibid. Binding Tnists far Sale (1926) 61 ibid. 654. "7 (1926) 16 & 17 Geo. V, c. 11, Schedule, Amendment to Lw or PnoP- ERTY AcT (1925) 15 Geo. V, c. 20, § 2 (2). 38 (1925) 15 Geo. V, c. 18, § 72 (3) b; see Bordwell, Propcrty Refornz in England (1925) 11 IOWA L. REV. 1, 16. 1 (1925) 15 Geo. V, c. 18, §§ 21 (2), 72 (2) (iii) (b), (,"); (1925) 15 Geo. V, c. 20, § 2 (2). 20 (1925) 15 Geo. V, c. 22, § 10 (1) class C, class D, § 13 (2). 21 (1925) 15 Geo. V, c. 20, § 199 (1) (i). Mr. Lightwood raises the que - tion whether this section and section 13 of the Lu' CHRGs ACT (192.)) 15 Geo. V, c. 22, cited in the preceding note, will be given the drastic tffect indicated above, but admits that no one would wish his own client involved in it. Lightwood, The Registration of Rcstrictive Covc. .wnt (1927) 63 LAW JOURNAL 28. The requirement of registration "before the completing of the purchase" even though there be actual notice made necessary section 4 of the LAW OF PROPERTY (AmENDmENT) AcT (1926) 16 & 17 Geo. V, c. 11. 22 (1925) 15 Geo. V, c. 20, §§ 34, 35. '3 (1925) 15 Geo. V, c. 18, § 1. The exceptions are (1) land limited to a married woman with a restraint on anticipation (Q 1 (1) (iv)) and (2) land subject to a family charge (§ 1 (1) (v) ). YALE LAW JOURNAL sale seem to cover the whole field of express trusts as well as the artificial settlements and trusts for sale created by statute. 4 They. are also made mutually exclusive 25 If the trust is not a trust for sale it is a settlement: A trust for sale is officially de- fined as an immediate binding trust for sale.20 The typical settlement is where there are successive interests. The only legal estates left that can be created or conveyed at law are the estate in fee simple absolute in possession, and the term of years absolute.27 All other estates take effect as equitable interests. 2 Not properly estates, but called such in the statute,20 are a limited number of interests such as easements in fee and charges by way of legal mortgage which are cognizable at law?0 It is through these two devices, then, the settlement and the trust for sale, that free trade in land has been secured without ;sacrificing the interests of future generations.